Yesterday we had a very bad CPI reading. The market dumped on the initial news, but during the US trading day the market recovered all of it's losses and more in a matter of hours.
I, and many other market participants, thought we would see further bearish price action. I didn't expect this massive move at all, but it's explainable in retrospect.
There are potentially a dozen reasons why yesterday happened the way it did, but in my opinion the number 1 reason was that too many traders were short already and no one wanted to sell further after a huge -4% candle. A classic short-squeeze.
I think that this bullish price action will not last. The macro economic outlook has only deteriorated further, leading to more interest rate hikes. This rally might keep on for a few more days, but in the end we're likely to dump further.
I'm not convinced until two things happen: 1. A break out through the top resistance of the bearish triangle (note the big reversal a couple of hours ago) 2. A daily candle close above 20.5k, we've been trading in a horizontal range for almost 2 months now and I'd like to see a break out before I start thinking bullish.
Do you believe the pump? Share your thoughts🙏🔥
My thought: - Bitcoin is holding pretty well compare to the SP500 for some reason, maybe because BTC already break the weekly MA200 & MA233 back in June - The SP500 touched its weekly MA233 yesterday then created a huge bounce back, which is pretty similar to what it did back in 2008 (I read and totally agree with your comparison article too) - If we assume the SP500 will follow the 2008 pattern, we can expect another test to the weekly MA233 and then a bear market rally from there, same thing for BTC (so 17600-18100) could be a temporary bottom for now. - After touching the MA233 in 2008 the SP took another year to actually reach the real bottom, so we could see something similar to this cycle Thanks for your analysis and happy trading :)
Short squeeze. To me needs to close above 20.5k for two weeks straight to confirm new trend
Daveb440
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I have the end of Oct factored in for an action point. I'm thinking a move to the downside. I have 30 Oct 22 as a date to watch.
wargolynch
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Right now, the only people opening long positions are the one looking at what does not even look like the "breakout" of the linear chart's first trendline. Why first? Because that's not even a double trendline C.fork pattern. What they should wait for is a real visible retest, not just noise.
wargolynch
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But for obvious reasons to anyone who spent years looking at markets, what they should really consider is the logarithmic chart. "But why? The logarithmic chart is distorting everything blablablablabla!!!" Nobody cares what it looks like and it gives a better perspective in both bull and bear markets. Now take a look at past macro trendlines on the linear chart... First cycle: good results after C.fork pattern confirmation only.
Second cycle: same, with a fake bullish signal on the first trendline that resulted in a huge weekly drop.
Third cycle: only fake signals here.
wargolynch
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"Oh but then what happens when everyone look at the log chart and/or start using C.fork confirmations?" ^_^ Will not ever happen, because as the world's population grows the noobs' population follows.
illuminating_trade
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CryptoCheck-
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Some great points. I share the same view, it's a trap. Thanks!
BigFrenchChicken
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NOTE TO MARKET - YOU DO NOT WANT POSITIVE REAL RATES...THAT BRINGS THE CRASH.
Agree with this assessment. Market players keep thinking that we return to the free-money paradigm. They keep bidding risk thinking they are early. The world is so different. We have not even started the market selloff (we don't even have a risk-off alternative investment - the real estate sells which brings the market to lows). Then, we have a total repudiation of multilateralism that will require the creation of an entirely new system (technology, supply chains, finance, etc.). The US has so many major headwinds...corps will need to issue new shares to pay off commercial loans (when they goosed their shares prices by taking loans to pay back debt)...oh yeah...everyone is effectively closed out of the debt markets right now.
Next thought...in the beginning of the year 1M capital (think housing) cost 21K a year or 1800ish a month. now costs 70K a year or 5800 a month. But housing prices are at their highs...just selling slowed or stalled. House prices at these rates SHOULD be 60% less. Anyone who wants to bet on more debt versus a housing crash is a fool. AND REMEMBER...that knock-on effect on the debt markets with illiquidity and insolvency will be massive (should have happened in 2008).
Last thought...USD/Tbill NOT the standard anymore for many nations. US has abused its natural advantage and spent on BS like a drunken sailor. Knock-knock...those are the chickens coming home. Education, healthcare, political division, racial tensions...HECK, one of our major parties is supportive of a f'ng moron who tried to pull a "soft-coup". US is not just weird (hair paint, i have a pee-pee, but want a woo-woo...), but uncompetitive and busy smoking weed in mommies basement. What we did with the power is an utter embarrassment.
- Bitcoin is holding pretty well compare to the SP500 for some reason, maybe because BTC already break the weekly MA200 & MA233 back in June
- The SP500 touched its weekly MA233 yesterday then created a huge bounce back, which is pretty similar to what it did back in 2008 (I read and totally agree with your comparison article too)
- If we assume the SP500 will follow the 2008 pattern, we can expect another test to the weekly MA233 and then a bear market rally from there, same thing for BTC (so 17600-18100) could be a temporary bottom for now.
- After touching the MA233 in 2008 the SP took another year to actually reach the real bottom, so we could see something similar to this cycle
Thanks for your analysis and happy trading :)